Best Company sells office supplies. The following information summarizes Best's operating activities for 2012:
Utilities for store Rent for store Sales commissions Purchases of merchandise Inventory on January 1,2012 Inventory on December 31,2012 Sales revenue $6,000$8,000$4,500$54,000$30,000$20,500$108,000
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Required: Prepare an income statement for Best Company, a merchandiser, for the year ended December 31, 2012.using the format below:
Sales revenue
Cost of goods sold Beginning inventory Purchases Cost of goods available for sale Ending inventory Cost of goods sold Gross profit Selling expenses Sales commissions General expenses Rent expense Utilities expense Total operating expenses Net income/(loss)
Definitions:
Accounting Functions
The systematic process of recording, analyzing, summarizing, and reporting the financial transactions of a business.
Collateral
Assets pledged by a borrower to secure a loan or other credit, ensuring the lender can seize these assets if the borrower fails to repay.
C-Corporation
A C-Corporation is a business structure where the owners or shareholders are taxed separately from the entity, which is recognized as a legal entity under U.S. law.
Double Taxation
The imposition of taxes on the same income, asset, or financial transaction at two different levels, such as corporate earnings and shareholder dividends.